Connect with us

Business

Oil Revenue And Northern Governors’ Agitation

Published

on

Government admitted that 40,000 oil spills had occurred in the past 53 years of oil exploration. In the report, the World Bank claimed that the palm groves, shorelines, creeks and other habitable areas would be washed away by erosion as well as spills due to vandalism, system failure and crude oil theft.  Apart from effects of oil spills, gas flaring constitutes a veritable hazard. It causes acid rain which acidifies the lakes and streams and damages crops and vegetation. It reduces farm yields and harms human health; increases the risk of respiratory illnesses, asthma and cancer and often causes chronic bronchitis, decreased lung function, blindness, impotence, miscarriages and premature deaths. Constant heat and the absence of darkness in some communities have done incalculable damage to human, animal and plant life in affected areas. Gas flares also cause affected places to be covered in thick soot, making even rain water unsafe for drinking. A United Nations Environment Programme (UNEP) report, last August, criticised how the Shell Petroleum Development Company (SPDC) deals with the environmental damage it has caused in the Niger Delta, especially in ogoniland. UNEP said Ogoniland needed the world’s largest ever oil clean_up, which would cost an initial $1billion or N160 billion and could take 30 years. How Ogoniland and other polluted communities would be cleaned is a matter of conjecture. If now that oil revenue is available the areas cannot be cleaned, is it when the revenues cease that the task will be embarked upon? By projection, Nigeria currently has proven crude oil reserves of about 37.2 billion barrels which at the current rate of exploitation (2.5mbp) may be exhausted in the next 40 years unless new deposits are discovered. Like most oil-bearing areas of the world, the Niger Delta has a tough terrain, which needs huge funds to be developed. Often times, oil producing areas are marshy or arid and most of the parts of the Niger Delta is marshy. The devastation of the Niger Delta region has been attributed, among others, to many failures of policy in the region and refusal of the government to pay special attention and inject funds into the area for development. Till date, no city in the region has been mapped out for a special development as the government did in Lagos and Abuja.”

“In the beginning: In 1958, before crude oil became a critical factor in Nigeria’s development, Sir Henry Willink’s Commission recommended that the Niger Delta region deserved special developmental attention by the Federal Government because of its difficult terrain. In response, the government established the Niger Delta Development Board (NDDB) in 1960 to tackle the developmental needs of the region. The board in  its seven years of existence achieved little or nothing. It was consumed by the military coup of 1966 and the outbreak of the civil war in 1967. Before and shortly after Nigeria’s independence in 1960, the federating units (regions) retained 50 per cent of revenues derived from their areas and contributed the rest to the central pool. It was on this basis that the regional governments led by late Chief Obafemi Awolowo (West); Dr Nnamdi Azikiwe (East); Sir Ahmadu Bello (North) and later Dennis Osadebey (Mid-West) unleashed unparalleled development in their respective areas. However, the 50 per cent derivation principle was kicked aside by the military in 1967 as earnings from crude oil skyrocketed. First, parts of the proceeds were used to prosecute the Nigeria-Biafra civil war of 1967 to 70. After the war, the military rulers refused to return to the status quo and chose to disburse funds to the states as they deemed feat. The military also created numerous states and local councils, which were funded with oil money. The oil producing areas were short-changed in the series of state and councils creation sprees. The President Shehu Shagari Administration set up a Presidential Task Force (popularly known as the 1.5 % Committee) in 1980 and 1.5 per cent of the Federation Account was allocated to the Committee to tackle the developmental problems of the region. This committee could not achieve much. There were doubts if the government actually disbursed 1.5 per cent of the revenue to the committee. And most of the funds released were allegedly looted.

So, when General Ibrahim Badamasi Babangida came to power, he set up the Oil Mineral Producing Areas Commission (OMPADEC) in 1992 and allocated 3 per cent of federally collected oil revenue to it to address the needs of the areas. Like its forebears, the OMPADEC, which initially raised hopes also failed to deliver as it perceptively became inefficient and corrupt. When General Sani Abacha took over, he set up the Petroleum Trust Fund (PTF) headed by Major General Muhammadu Buhari (rtd). The PTF did not meet the yearnings of Niger Deltans as its mandate covered all parts of the country. With critics saying that the PTF carried out more projects in northern parts of the country, restiveness in the Niger Delta assumed a higher gear. Abacha convened a National Constitutional Conference (NCC) in 1994, where conferees agreed on at least 13 per cent derivation. Abacha did not live to implement the recommendation. His successor, General Abdulsalami Abubakar included it in the 1999 Constitution, which he handed over to President Olusegun Obasanjo on May 29, 1999. On his part, Obasanjo scrapped the PTF and established a special body, the Niger Delta Development Commission (NDDC), to undertake rapid development of the impoverished oil region. He foot-dragged on the payment of the 13 per cent derivation until the oil producing states got a court judgment, which forced him to pay the proceeds beginning from June 1999.”

“At the National Political Reforms Conference (NPRC) convened by Obasanjo in 2005, South-South delegates insisted on 25 per cent derivation and had to walk out on the gathering when the other parts of the country said they could not approve anything more than 18 per cent, which was later recommended. However, this recommendation did not see the light of the day and died with Obasanjo’s alleged third term ambition. On succeeding Obasanjo, late President Umaru Musa Yar’Adua established the Ministry of Niger Delta Affairs, to offer more palliatives to the region. When militancy took the upswing in the area and knocked down oil production to about one million barrels per day, he also offered amnesty to the militants, a programme that has gulped billions of Naira.

The current fire of derivation controversy raging in the polity was ignited a few weeks ago when a host of northern leaders including Central Bank of Nigeria (CBN) Governor, Malam Lamido Sanusi; Niger State Governor and Chairman of the Northern Governors Forum (NGF), Dr Mu’azu Babangida Aliyu; the Arewa Consultative Forum (ACF) and Dr. Junaid Mohammed decried the huge revenues going to the oil producing states and sought reduction of the proceeds to free more money that could be allocated to northern states. Some of them attributed the Boko Haram insurgency ravaging many northern cities especially in the North-East geo-political zone to poverty arising from disproportionate revenue allocation to the North. The northern demand drew the ire of some Niger Deltans, who demanded true federalism and 50 per cent derivation.

“Disturbed by the dangerous dimension the derivation question and other issues such as insecurity and stunted growth were taking in the country, former Commonwealth Secretary General, Chief Emeka Anayaoku, has canvassed a return to true federalism, to address the issues. Speaking a colloquium to mark Asiwaju Bola Ahmed Tinubu’s 60th birthday in Lagos, he said: “I do believe that a true, rather than our current unitarist federalism, will better promote peace, stability and development in Nigeria. There can be no doubt that Nigeria was making more progress in national development in the early years of its independence when it practiced a true federalism of four regions with more extensive powers devolved from the centre to the regions. Those were the days of the significant export of groundnuts,  hides and skins, and the tin ore from the North; of cocoa from the West; of rubber from the Mid-West; and of palm produce and coal from the East of Nigeria. They were also the days of such achievements as the free universal education and introduction of television in Chief Awolowo’s Western region, and of the budgeoning industrialization of Dr Okpara’s Eastern region.”

“To return to true federalism, we need a major restructuring of our current architecture of governance.  We would need six  federating units, instead of our present 36, which not only sustains an over dominant centre, but also compels the country to spend not less than 74 per cent of its revenue on the cost of administration.

“We need to convene a national conference of appropriately chosen representatives of the six geopolitical zones to dialogue on how to face these serious challenges. I believe that if we are to recapture the zeal with which the then regional Premiers and their electorates embarked on the development of their regions, if we are to arrest  the present destructive competition between our various ethnic groups for the control of power at the centre, and if we are to repair the collapse in our societal value system which is at the root of the pervasive corruption and degradation of our public services, we should aim at getting the national conference to reach a consensus on devolving from the centre to the six federating units responsibility for such areas of governance as internal security including the police, infrastructure, education, health and economic development.” Anyaoku’s suggestion has the endorsements of many eminent Nigerians drawn from all parts of the country.

The agitation against the 13% oil revenue derivation to oil producing states and the attendant ecological and devastation from oil exploration without commensurate infrastructure development of the region is unfair and unjustifiable in the face of recent Boko Haram insurgence and agitation for more revenue from the Northern States.

Dr. Akpogena, a Christian devotional Writer/Minister, Educationist and Consultant writes from Port Harcourt.

 

Lewis Akpogene

Continue Reading

Business

Two Federal Agencies Enter Pack On Expansion, Sustainable Electricity In Niger Delta

Published

on

The Niger Delta Development Commission (NDDC) has signed a Memorandum of Understanding (MoU) with the Rural Electrification Agency (REA) to expand access to reliable and sustainable electricity across the Niger Delta region.
The agreement, signed at the headquarters of the REA in Abuja, was targeted at strengthening institutional collaboration and accelerating development in underserved communities in the region.
A statement by the Director, Corporate Affairs of the NDDC, Seledi Thompson-Wakama, said the pact underscores renewed efforts by the two federal interventionist agencies to deepen cooperation and fast-track infrastructure delivery.
Speaking at the signing ceremony, the Managing Director of the NDDC, Dr Samuel Ogbuku, described the MoU as a strategic step towards realising the Commission’s vision to “light up the Niger Delta” in line with national priorities on distributed energy expansion.
Ogbuku said the agreement represents a shared institutional responsibility to deliver reliable energy solutions that will enhance livelihoods, stimulate local economies and create broader opportunities across the nine Niger Delta states.
According to him, electricity remains a critical enabler of national development, supporting job creation, healthcare delivery, education and inclusive economic growth.
He noted that the collaboration would help unlock the economic potential of rural communities while advancing broader national development objectives.
The NDDC boss added that the Commission has consistently adopted partnership-driven approaches in executing projects in the region and is prepared to support the implementation of the MoU by leveraging its community presence and infrastructure development capacity.
He reaffirmed the Commission’s commitment to working closely with the REA to ensure the timely and effective execution of the agreement.
The NDDC delegation at the event included the Executive Director, Projects, Dr Victor Antai; Executive Director, Corporate Services, Otunba Ifedayo Abegunde; Director, Legal Services, Mr Victor Arenyeka; Director, Finance and Supply, Mrs Kunemofa Asu; and Director, Liaison Office, Abuja, Mrs Mary Nwaeke.
In his remarks, the Managing Director of the REA, Dr Abba Abubakar Aliyu, described the MoU as a natural collaboration between two agencies with complementary mandates, reflecting a shared commitment to expanding access to sustainable electricity in rural communities.
Aliyu said the Niger Delta remains central to Nigeria’s economic fortunes and must be supported by infrastructure capable of driving productivity, enterprise and improved living standards, adding that the partnership signals readiness to deliver stable power to communities that have long awaited reliable electricity supply.
By: King Onunwor
Continue Reading

Business

Why The AI Boom May Extend The Reign Of Natural Gas 

Published

on

Artificial intelligence is often viewed as a catalyst for electrification and subsequently decarbonization. Yet one of its most immediate effects may be the opposite of what many assume. The rapid buildout of AI infrastructure is increasing demand for reliable power, and that reality could strengthen the role of natural gas and other dispatchable energy sources for many years.
Investors focused on semiconductors and software valuations may be overlooking a key constraint. AI runs on electricity, and those electricity systems operate within physical and economic limits.
The energy sector has spent much of the past decade grappling with slow load growth. That is now changing, in a way that is reminiscent of the sharp rise in oil demand—and subsequently price—in the early 2000s.
Training large language models and operating advanced AI systems requires enormous computing resources. Hyperscale data centers are expanding rapidly, with developers requesting gigawatt-scale interconnections from utilities. In several regions, electricity demand forecasts have been revised upward after years of flat expectations.
This shift is significant because AI workloads create continuous, high-density demand rather than intermittent usage. Data centers cannot simply power down when the electricity supply becomes constrained. Reliability becomes paramount.
Wind and solar capacity continues to expand, but intermittent generation alone cannot meet the firm capacity needs of AI infrastructure without significant storage or backup generation.
Battery storage is improving, yet long-duration storage remains costly at scale. Nuclear projects face long development timelines and complex permitting hurdles. Transmission expansion also lags demand growth in many regions.
These constraints make dispatchable power sources critical. Natural gas plants can ramp quickly, operate continuously, and be deployed faster than many alternatives. As a result, gas-fired generation is increasingly viewed as a practical solution for supporting AI-driven load growth.
This does not undermine the role of renewables. In many markets, new renewable capacity is paired with gas generation to maintain grid stability. The key point is that AI-driven electrification is likely to increase fossil fuel usage in the near term.
Construction timelines favor gas-fired generation when demand rises quickly. Existing pipeline infrastructure reduces barriers to expansion. And for operators of data centers, reliability often outweighs ideological preferences. Downtime is simply too expensive.
Utilities are also revisiting resource plans as load forecasts rise. That shift may drive increased investment in transmission, grid modernization, and flexible generation assets.
The Decarbonization Story Is Complex
A common narrative holds that AI accelerates the transition away from fossil fuels because it increases electrification. The reality is more nuanced.
If electricity demand outpaces the buildout of low-carbon capacity, fossil generation may still increase in absolute terms even as renewables gain market share. Total emissions could rise, but the carbon intensity of the energy system may trend lower as cleaner sources make up a larger share of supply.
Ultimately, energy systems evolve based on engineering and economics, not just policy goals or market narratives.
Rising power demand could benefit utilities investing in transmission and generation capacity. Natural gas producers and midstream companies may see structural demand support from increased power-sector consumption. Equipment suppliers tied to grid reliability and gas turbines could also gain from the shift.
Longer term, advances in nuclear, storage, or efficiency may change the trajectory. For now, the immediate response to surging electricity demand is likely to rely on technologies that can be deployed quickly and reliably.
Artificial intelligence may reshape the economy in profound ways. One of the least appreciated consequences is that it may extend the relevance of natural gas as the world builds the energy backbone required to power the next generation of computing.
By: Robert Rapier
Continue Reading

Business

Ogun To Join Oil-Producing States  ……..As NNPCL Kicks Off Commercial Oil Production At Eba

Published

on

Ogun State is set to join the comity of oil producing states in the country following the discovery and subsequent approval of commercial oil exploration activities in the Eba oil well, in Ogun Waterside Local Government Area of the state.
A technical team from the Nigerian National Petroleum Company Limited (NNPCL) has visited the area as preparations are in advanced stage for commencement of commercial drilling operations in the state.
The inspection followed President Bola Ahmed Tinubu’s approval for commercial exploration, forming part of the federal government’s efforts to deploy the required technical capacity and infrastructure for production.
Officials of NNPCL carried out the exercise alongside representatives of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and national security agencies to evaluate the site and confirm its readiness for drilling activities.
The delegation was led by Project Coordinator for Enserv, Hussein Aliyu, who headed the NNPCL Enserv technical team.
Other members included Wasiu Adeniyi, Onwugba Kelechi, Engr. Rabiu M. Audu, Ojonoka Braimah, Ahmad Usman, Akinbosola Oluwaseyi, Salisu Nuhu, James Amezhinim, Yusuf Abdul-Azeez, Amararu Isukul and Livinus J. Kigbu.
Speaking, Governor Dapo Abiodun, described the development as a landmark achievement for Ogun State, saying “the commencement of drilling at Eba would stimulate economic growth, create employment opportunities and attract increased federal presence to the state’s coastal communities.
Abiodun also expressed appreciation to President Tinubu for his support toward the development of frontier oil basins and the equitable spread of the nation’s energy resources.
Recall that geological reports had earlier confirmed the presence of hydrocarbons within the Ogun Waterside axis, leading to preliminary surveys and technical engagements by NNPCL.
The Ogun State Government also carried out an independent verification of the oil well’s coordinates, affirming the discovery is located within the state’s boundaries.
To secure the project, naval security personnel have been deployed to the site for over 18 months, with the support of the Ogun State Government, to protect the facility and its environs.
The Eba oil well is regarded as part of Nigeria’s strategic move to expand oil production beyond the Niger Delta region.
Continue Reading

Trending